Recently, MSCI announced to transfer its market index derivatives group related to Asia from Singapore Exchange to Hong Kong stock exchange. According to Fang Xinghai, this is the markets own choice, and the government has no intervention. According to his understanding, MSCI has two main reasons for doing this: on the one hand, Hong Kongs market is already very developed in equity derivatives, and its varieties and transactions have a good foundation. MSCI believes that the transfer of products to Hong Kong will be more conducive to the operation of these products. On the other hand, Hong Kong has the largest number of global institutional investors in Asia, especially equity institutional investors. Their investment behavior is very active. These equity derivatives are mainly designed for them. MSCI also believes that the market will be more active after the product is moved to Hong Kong.
The return of China capital stock also shows that the market is optimistic about the development of Hong Kongs international financial center. Fang Xinghai said that many of Chinas very growing and high-quality companies have been listed in New York before, and New York is its only listing place. In the new situation, these companies feel it is necessary to have a second listing place. These are the companys own choices, and the CSRC is also very supportive of the companys choices. Second listing place these companies mainly choose Hong Kong. According to Fang Xinghai, this is because Hong Kongs relevant system on second listing is relatively perfect, and Hong Kong, as the main international financial center in Asia, is closely related to the capital market in the mainland, which is very conducive to attracting these medium-sized companies in Hong Kong.
Fang also said that the internationalization of RMB is closely related to the prospect of Hong Kongs international financial center. He stressed that the internationalization of RMB is a subject that needs to be planned ahead of time and cannot be bypassed when dealing with the external financial pressure in the future.
It has been 11 years since the RMB settlement of cross-border trade was first launched in Shanghai in July 2009. Fang Xinghai believes that RMB internationalization has made many achievements, for example, RMB has ranked fifth in the international payment currency market and seventh in the international foreign exchange market. In October 2016, RMB successfully joined the SDR basket; in October 2015, RMB cross-border payment system was launched in Shanghai. However, he stressed that despite many achievements, RMB internationalization has only begun on the whole, and should be accelerated in the next decade.
He gave three reasons. First, our government and residents hold huge assets abroad, and most of them are US dollar assets. Under the current monetary policy guidance of the Federal Reserve, the value of US dollar assets is facing great uncertainty.
From March to May this year, the balance sheet of the Federal Reserve expanded from $4.2 trillion to $7.1 trillion. Before the outbreak of the global financial crisis in 2008, the balance sheet of the Federal Reserve was only $900 billion. Looking at history, it is easy for a reserve currency country to go to a path to solve its own internal problems by printing money, rather than through difficult reform. Fang Xinghai said that in the future, the trend of the monetary policy of the Federal Reserve will not escape the law of history. Therefore, the protection of the value of our overseas assets is inseparable from the internationalization of RMB. If our overseas assets exist in the form of RMB, there will be no such problems.
Secondly, Chinas monetary policy, financial opening and financial development are all affected by the global monetary and financial system. Under the current monetary policy of the Federal Reserve, whether the global monetary and financial system will face great uncertainty and many risks is an issue that cannot be ignored.
Third, most of our financial institutions and entities carry out international business, mainly relying on the US dollar payment system. But whether the payment system is safe or not is worth worrying. This kind of thing has happened to many enterprises and financial institutions in Russia. We have to prevent it as early as possible and make real preparations, not just mental ones..
One belt, one road, one belt, one road, and the other is the other way around. If the internationalization of the RMB is not promoted simultaneously, the strategy of one belt and one road will be mainly promoted by foreign currencies. Im afraid that the momentum will also be restricted. Fang Xinghai stressed that, considering the pressure from abroad, some major strategies for RMB internationalization should be well prepared.
Fang denied that some people worry that peoples internationalization is due to Chinas self integration. On the contrary, Chinas development strategy has always been integrated development and mutually beneficial development. If we can make greater progress in RMB internationalization, our ability to resist such financial decoupling will be greatly enhanced, which in turn will promote us to firmly follow the path of integrated development. .
Fang Xinghai said that its not good to identify with the strategy of RMB internationalization as it comes naturally. But in the new situation, especially in the new international competition pattern, we should better combine the natural course with the preparation.
Source: interface news Author: Yao Qiuqi editor in charge: Wang Xiaowu_ NF